FERs Retirees, anyone?

[Maricar19]

FYI #2: FERS Postal:

Retiring at Minimum Retirement Age (MRA) before age 62 and with 30 years of service entitles you to Supplemental Annuity or Supplemental Income (SI). Supplemental Income is approximately equal to 75% of the Social Security benefit that you would have received at age 62. Just like your SS benefit, this is subject to earned income threshold. Cashing your accrued annual leave will not affect your Supplemental Income.

Example: Retired on December 31 with 560 hours of earned annual leave at $30.00 per hour. This equates to a lump sum of $16,800 (pre-tax) plus you will receive SI of approx. $750 per month if SS benefit at age 62 is $1000. Don’t forget you will also receive FERS annuity and TSP if you decide so.

Disclaimer: Scenarios quoted here are almost always applicable only to me and my spouse. Your scenario might differ from ours.
There are always exceptions to the rule. Always check with OPM or your agency.

 

[Lakebound]

As a retired LEO you can make Life Expectancy Withdrawals that would be penalty free. The catch is that you would be locked into that withdrawal scheme until you reach 59.5 or after five years, whichever scenario is longer. You need to look up Dan Jamison's FERS Guide for Law Enforcement and Firefighters. Dan is a retired FBI Special Agent who spent many years developing the unofficial guide and used to distribute it for free. Now that he's retired, for 2015 he's set up a website and now charges $10 for the guide. Even with the charge, it's still the best $10 you will spend. He also produces a similar guide for non-LEO's (or retirement guide for regular federal employees). 84 pages of what the FERS is all about. PM me if you have trouble finding it online.

Lakebound - Forgot to say, when you retire at age 50 you don't have to do anything with your TSP. You can let it ride.

Thanks for the additional information. I am sure this will help Lakebound.

Thank you all so very much. I will be researching Mr. Jamison's information and buying his guide.

Regards,

Frank

Sent from my XT907 using Tapatalk

 

[clester]

I am retired ATC. Almost 5 years ago. Whew, time flies. Anyway I took 72t withdrawals using amortization rule. That plus supplement plus fers pension from 26 years service (40%) plus the reduced deductions for Medicare, fica , tax etc gave me a take home pay close to what I was making before take home. My TSP balance is about the same as it was when I retired. So, my returns equal my withdrawals over that time. So, my opinion is to go ahead and start 72t withdrawal if it will help you retire. Enjoy it while your young. You can start changing the monthly amounts after age 59.5. This incurs no penalties but of course you pay taxes.

 

[Maricar19]

FYI #3 - How much Sick Leave (SL) hours do you need to get a month or a year added to your annuity? SL is not added to your service time qualification, but to your annuity computation.

Example: If you have 29 years of postal federal service and 1 year and 29 days worth of Sick Leave. The 1 year accrued sick leave cannot be added to make your service time 30 years. However, it will be added/used to compute your $annuity. SL less than a month will not be used in the computation. Consider them your donation to the postal service.

See attached SL chart. I think I got it from OPM website.



Disclaimer: Scenarios quoted here are almost always applicable only to me and my spouse. Your scenario might differ from ours.
There are always exceptions to the rule. Always check with OPM or your agency.

 

[Lakebound]

I just downloaded Mr. Jamison's guide and I look forward to reading it and applying it over the next 15 months.

Frank

Sent from my XT907 using Tapatalk

 

[Maricar19]

I just downloaded Mr. Jamison's guide and I look forward to reading it and applying it over the next 15 months.

Frank

Sent from my XT907 using Tapatalk

Kudos to OBgibby for this valuable info. Check out Clester's info, too.

 

[Lakebound]

Kudos to OBgibby for this valuable info. Check out Clester's info, too.

Will do. Thanks everyone.

Frank

Sent from my XT907 using Tapatalk

 

[Lakebound]

I am retired ATC. Almost 5 years ago. Whew, time flies. Anyway I took 72t withdrawals using amortization rule. That plus supplement plus fers pension from 26 years service (40%) plus the reduced deductions for Medicare, fica , tax etc gave me a take home pay close to what I was making before take home. My TSP balance is about the same as it was when I retired. So, my returns equal my withdrawals over that time. So, my opinion is to go ahead and start 72t withdrawal if it will help you retire. Enjoy it while your young. You can start changing the monthly amounts after age 59.5. This incurs no penalties but of course you pay taxes.

This is the sort of "meat & potatoes" information that really helps. Thank you for being kind enough to share.

Frank

Sent from my XT907 using Tapatalk

 

[OBGibby]

FYI #2: FERS Postal:

Retiring at Minimum Retirement Age (MRA) before age 62 and with 30 years of service entitles you to Supplemental Annuity or Supplemental Income (SI). Supplemental Income is approximately equal to 75% of the Social Security benefit that you would have received at age 62. Just like your SS benefit, this is subject to earned income threshold. Cashing your accrued annual leave will not affect your Supplemental Income.

Example: Retired on December 31 with 560 hours of earned annual leave at $30.00 per hour. This equates to a lump sum of $16,800 (pre-tax) plus you will receive SI of approx. $750 per month if SS benefit at age 62 is $1000. Don’t forget you will also receive FERS annuity and TSP if you decide so.

Disclaimer: Scenarios quoted here are almost always applicable only to me and my spouse. Your scenario might differ from ours.
There are always exceptions to the rule. Always check with OPM or your agency.

LEO, FF, ATC can collect the Special Retirement Supplement until their Minimum Retirement Age with no earnings test.

 

[Maricar19]

LEO, FF, ATC can collect the Special Retirement Supplement until their Minimum Retirement Age with no earnings test.

OBgibby: Is that applicable regardless of Federal or State LEO?

 

[OBGibby]

Federal LEO. None of my comments pertain to state retirement provisions.

 

[Maricar19]

FYI #2: FERS Postal:

Retiring at Minimum Retirement Age (MRA) before age 62 and with 30 years of service entitles you to Supplemental Annuity or Supplemental Income (SI). Supplemental Income is approximately equal to 75% of the Social Security benefit that you would have received at age 62. Just like your SS benefit, this is subject to earned income threshold. Cashing your accrued annual leave will not affect your Supplemental Income.

Example: Retired on December 31 with 560 hours of earned annual leave at $30.00 per hour. This equates to a lump sum of $16,800 (pre-tax) plus you will receive SI of approx. $750 per month if SS benefit at age 62 is $1000. Don’t forget you will also receive FERS annuity and TSP if you decide so.

Disclaimer: Scenarios quoted here are almost always applicable only to me and my spouse. Your scenario might differ from ours.
There are always exceptions to the rule. Always check with OPM or your agency.

Clarification: 75% is based on 30 years of service (30 civilian years/40 SS years). This ratio will vary according to your #of years of civilian service.
Source: Chapter 51-Retiree Annuity Supplement (OPM)

 

[Maricar19]

For starters, let me tell you about myself. I already reached my MRA (minimum retirement age), but a tad short of 30 years of service. So I really cannot retire until April of 2015. The caveat of retiring without 30 years of service is you don't get the supplemental income and annuity is a lot less than when you have 30 under your belt.t

Correction to the statement above. It's the other way around. You get supplemental income (SI) even if you don' have thirty (30) years of service, but you don't get SI if you haven't attained your minimum retirement age yet.

Of course, different rules apply to special interest group, e.g.LEO, ATC, and fire fighters to name a few.

The caveat of retiring without 30 years is you get less $FERS annuity - a diff of almost $300-$$500 depending on your salary bracket.

 

[Maricar19]

Any comments to the statement below? I am confused. I thought if you hold off collecting your SS benefits, you will be reap more $$. Reggie Jones says otherwise.

"BY REG JONES ON JANUARY 23, 2015 EARLY RETIREMENT
Q. I am a 62-year-old FERS employee. Can I retire with my FERS annuity and TSP and wait until my full retirement age of 66. I do not plan to work after I leave.

A. Yes, you can wait until your full retirement age, however, your Social Security benefit will be based on the amount you were entitled to when you retired."

 

[uscfanhawaii]

Any comments to the statement below? I am confused. I thought if you hold off collecting your SS benefits, you will be reap more $$. Reggie Jones says otherwise.

"BY REG JONES ON JANUARY 23, 2015 EARLY RETIREMENT
Q. I am a 62-year-old FERS employee. Can I retire with my FERS annuity and TSP and wait until my full retirement age of 66. I do not plan to work after I leave.

A. Yes, you can wait until your full retirement age, however, your Social Security benefit will be based on the amount you were entitled to when you retired."

Reg Jones is usually right on, so I thought you might have taken what he said out of context. So I looked up the quote at Retirement age but there was no additional info. The question and answer are just as you presented.

So I'm not sure exactly what he meant, but here is my take. SS is based on your highest 35 years of income. If you retire on your pension and TSP only, and put off taking your SS till your FRA, the 'basis' will still be on the same highest 35 yrs (since the 62 yr old said they would not work between 62 and FRA). However, you will not be docked 27% for taking SS at 62. You will get the full retirement amt, but still based on the same highest 35 yrs. So yes, you would get 27% more (or whatever the actual deduction it would have been), but it will still have the same 'high 35 basis'. Other than that, you will just have to ask Reg for clarification! :blink:

 

[PessOptimist]

Any comments to the statement below? I am confused. I thought if you hold off collecting your SS benefits, you will be reap more $$. Reggie Jones says otherwise.

"BY REG JONES ON JANUARY 23, 2015 EARLY RETIREMENT
Q. I am a 62-year-old FERS employee. Can I retire with my FERS annuity and TSP and wait until my full retirement age of 66. I do not plan to work after I leave.

A. Yes, you can wait until your full retirement age, however, your Social Security benefit will be based on the amount you were entitled to when you retired."

What uscfanhawaii said plus my $0.02.

I believe this statement about ss benefits to be incorrect. This page along with the links on the page will tell you the SSA rules.
Retirement Planner: Benefits By Year Of Birth
This may help: http://www.socialsecurity.gov/pubs/EN-05-10070-1952.pdf
What Mr. Jones may mean is that if you earn no more income, the amount you receive at full retirement will not be more than it would have been if you had been full retirement age when you retired? Retired from where? You are not retired ss wise until you apply for benefits even if you did retire from somewhere else?
Who is Reggie Jones? So many questions but this is why I try to research stuff myself using publications from the applicable agency instead of listening to experts.
Good luck in your quest for the truth. It is not often easy to find.
PO

 

[Maricar19]

Reg Jones is usually right on, so I thought you might have taken what he said out of context. So I looked up the quote at Retirement age but there was no additional info. The question and answer are just as you presented.

So I'm not sure exactly what he meant, but here is my take. SS is based on your highest 35 years of income. If you retire on your pension and TSP only, and put off taking your SS till your FRA, the 'basis' will still be on the same highest 35 yrs (since the 62 yr old said they would not work between 62 and FRA). However, you will not be docked 27% for taking SS at 62. You will get the full retirement amt, but still based on the same highest 35 yrs. So yes, you would get 27% more (or whatever the actual deduction it would have been), but it will still have the same 'high 35 basis'. Other than that, you will just have to ask Reg for clarification! :blink:

Thanks for the clarification. I, too,was surprised about his response to the person. I went to a retirement seminar recently and I asked if I will still get my estimated SS benefits for age 62 if I stop working when I retire at 58. He said "yes" -, but I am not sure if the response was right...ahh SS is very confusing.

 

[Maricar19]

What uscfanhawaii said plus my $0.02.

I believe this statement about ss benefits to be incorrect. This page along with the links on the page will tell you the SSA rules.
Retirement Planner: Benefits By Year Of Birth
This may help: http://www.socialsecurity.gov/pubs/EN-05-10070-1952.pdf
What Mr. Jones may mean is that if you earn no more income, the amount you receive at full retirement will not be more than it would have been if you had been full retirement age when you retired? Retired from where? You are not retired ss wise until you apply for benefits even if you did retire from somewhere else?
Who is Reggie Jones? So many questions but this is why I try to research stuff myself using publications from the applicable agency instead of listening to experts.
Good luck in your quest for the truth. It is not often easy to find.
PO

Thanks PO. After reading yours and USCfanhawaii's explanation, I think I understand now what Reggie Jones meant. I think he meant if the person's current estimated benefits as of age 62 is $1000, age 66 is $1500, age 70 is $2000 ($$ are hypothetical), that's all he's gonna get, no possibility of either amounts increasing except for COLA.
That makes me worried since I plan to retire at 58 w/o any intentions of working. I will only get 30 years and not 35 years as uscfanhawaii mentioned. I was looking forward to my SS at 66, but the current estimated benefits might not be the same amount.
Oh well, I guess I need to tap my TSP...

PS. Reggie Jones is one of the "experts" in Ask the experts -Retirement of federaltimes.com

 

[Maricar19]

Here's another erroneous info:

Q. As a FERS letter carrier, if I retire and have 600 hours of unused annual leave, will I get a check for the 600 hours or is 440 the most I can get payed at retirement?

A. Because you are a postal service letter carrier, your lump-sum payment for unused annual leave is limited to 440 hours.


ME: The answer was partially right, a letter carrier can only carry-over a maximum of 440 hours to the next year. The key word is "Carry-over." However, the question was about retiring with 600 hours which I can correctly infer that he earned this extra 200 hours of annual leave in the current year and he is retiring EOY. The correct answer would have been YES, he'll get the 600 hours worth in $$.

 

[konakathy]

Here's another erroneous info:

Q. As a FERS letter carrier, if I retire and have 600 hours of unused annual leave, will I get a check for the 600 hours or is 440 the most I can get payed at retirement?

A. Because you are a postal service letter carrier, your lump-sum payment for unused annual leave is limited to 440 hours.


ME: The answer was partially right, a letter carrier can only carry-over a maximum of 440 hours to the next year. The key word is "Carry-over." However, the question was about retiring with 600 hours which I can correctly infer that he earned this extra 200 hours of annual leave in the current year and he is retiring EOY. The correct answer would have been YES, he'll get the 600 hours worth in $$.

I am a FERS letter carrier and my mantra has always been "use it, or lose it" especially with SL. I have never carried over 440 hours of AL let alone 40 hours. I'm going to try my hardest in the next four years to reach the goal of 160 hours. Pfft! Who am I kidding. :laugh: